How to stick to your budget as a homebuyer

As a homebuyer, there are many options on the real estate market making it easy for your budget to be blown out the window. This is why having a plan in place before you start your home buying journey can help you find a home meeting your needs while still staying within your budget. 

Try the 28 percent rule 

If you’re not sure where to start, consider using the 28 percent rule. With this method, you designate no more than 28 percent of your monthly income towards your mortgage payments. 

This rule emphasizes considering additional expenses outside your mortgage payments to have a balanced view of your finances. 

Collaborate with your real estate agent to stay on budget 

After hiring a real estate agent, it’s crucial to be upfront and honest with them about what you’re searching for in a home and the budget you have to work with. 

This way, time isn’t wasted viewing properties above budget which could tempt you to spend more money than what was originally planned. 

Consider additional expenses 

As you budget out how much you’ll need for monthly mortgage payments, also consider additional expenses such as: 

• Utilities.
• Debt.
• Medical expenses.
• Home insurance.
• Mortgage insurance (if your down payment is less than 20 percent). 
• Etc. 

Taking these additional expenses into account gives you a better idea of what your home buying budget will be. 

As you create your budget, take time to consider what you want, what you need and how much financial room you have to purchase a home with these aspects. Working with your real estate agent you can craft a home buying plan which encompasses everything you want for the right price.